Corporate America and Donald Trump

Don't mistake the corporate embrace of diversity for defense of democracy.

AP Photo/Tony Gutierrez

Demonstrators with Making Change At Walmart and the United Food and Commercial Workers protest Walmart's sale of Donald Trump products in Dallas.

This article appears in the Spring 2017 issue of The American Prospect magazine. Subscribe here.

Are big corporations among the firewalls protecting the Republic from Donald Trump? It would be comforting to think so.

Silicon Valley has risen up against Trump’s anti-Muslim attacks. More than 100 of the most prominent tech giants, from Microsoft to Tesla, signed an amicus brief challenging Trump’s immigration orders. Starbucks made a point of announcing that the company would hire 10,000 refugees.

The Super Bowl ads were a veritable festival of anti-Trump sentiment, some subtle, others surprisingly direct. Budweiser celebrated the dreams of its immigrant founder. An Airbnb ad declared, “We believe no matter who you are, where you’re from, who you love, or who you worship, we all belong.”

84 Lumber’s astonishing commercial followed a young Mexican girl and her mother trying to make it to America, on foot, in a boxcar, and on a flatbed truck, finally finding a door through a wall. Fox refused to air the full, six-minute version, but did run a cut-down one-minute spot whose message was unmistakable.

Google’s ad depicted a rainbow of families of different ethnicities, religions, and sexual orientations, ending with a party and a “Welcome Home” cake. Take that, Steve Bannon.

Several of America’s largest corporations, including Apple and Google, have defended transgender people. In a statement, Apple publicly attacked Trump’s repeal of guidelines on transgender bathroom use in schools: “We support efforts toward greater acceptance, not less, and we strongly believe that transgender students should be treated as equals.”

Target endorsed the proposed federal Equality Act, which adds protections to LGBT people. Corporate America continued voting with its feet against states that display bigotry. North Carolina, epicenter of both anti-transgender policy and suppression of voting rights, keeps losing convention business, sports events, and concerts.

Some 41 large companies have poked Trump in the eye by donating directly to Planned Parenthood, including not-especially-progressive outfits like American Express, both Coca-Cola and Pepsi, Nike, Ford, and Verizon. And Nordstrom, Macy’s, and several others have stopped carrying Trump family brands.

Professional sports teams with large numbers of black athletes took pains to distance themselves from Trump. Several players from the Super Bowl champion New England Patriots, a team with long-standing ties to Trump, boycotted the team’s White House visit.

A handful of franchise owners and officials have expressed their personal displeasure at Trump. John Angelos of the Baltimore Orioles said that Trump was not welcome to throw out the first ball unless he apologized for all the offensive things he’s said.

What gives? Is corporate America giving the commander in chief a big middle-finger salute?

BEFORE WE EMBRACE our improbable saviors too ardently, consider several caveats. Where are the corporations on the economic issues? Where they usually are, of course. They now have a plutocrat champion in the White House who makes William McKinley look like a socialist.

If you unpack the issues where big corporations are crossing Trump, they are the cultural ones—immigrant rights, transgender rights, reproductive rights, support for a multicultural America. This is progress, of a sort. It does serve as a counterweight to Trump’s cultivation of the most vicious forces of the far right.

However, on the core issues that have defined America’s slide into reactionary economic policies, corporate elites are lined up at Trump’s trough—to double down on the same policies they have been aggressively pushing since Ronald Reagan.

While America’s biggest companies, especially those with reputational concerns, are singing kumbaya with a multicultural rainbow, these same companies are happily taking the tax cuts, the deregulation, and the anti-labor laws. Even our liberal-ish friends in Silicon Valley want nothing to do with regulatory constraints, much less labor protections.

On some key policy issues, corporate America has proved to be surprisingly impotent. Three of the largest players in America’s health-industrial complex—the hospital industry, the insurance industry, and the American Medical Association—took strong stands against the Republican health bill, and lobbied against it. None of that cut any ice. How come?

Maybe they didn’t lobby all that hard. The bill includes some nice perks for insurance executives. It repeals the ACA’s limits on tax-deductible executive pay, intended to limit the ability of companies to pass along windfall profits from their expanded customer base to corporate brass. The drug companies, meanwhile, are salivating at the prospect of even less regulation under Trump’s FDA.

Likewise the bankers, and the energy industry, and the telecom giants. So companies with direct consumer exposure, such as AmEx or Verizon, can throw a few bucks at Planned Parenthood, while they chuckle all the way to the bank, buoyed by the prospect of lower taxes, less regulation, weaker unions, and right-wing judges who will overturn what remains of health, safety, consumer, labor, and environmental regulation.

On a handful of issues, there is convergence between corporate self-interest and common decency. Corporate America is liberal on immigration, but for all the wrong reasons.

Back when Republicans and Democrats were working on a compromise path to citizenship for undocumented workers, corporations were among the biggest backers. Imagine—all those low-wage workers under strict legal constraints to stay out of trouble. Yum.

Trump has appointed climate-change deniers to key energy and environment posts. Where is corporate America on that? A small segment of American industry is making money off the green economy, but the big fossil fuel companies are back in the saddle, thanks to Trump. And Walmart, the number one predator when it comes to mistreating workers, tries to change the subject by being the greenest robber baron in town. Where is the corporate pushback against the Republican war on science?

Several of the same corporations that took progressive stands on cultural issues, such as AmEx and Verizon, are also supporters of the American Legislative Exchange Council (ALEC), which promotes right-wing policies at the state level. Among the core items in ALEC’s playbook are strategies to suppress voting participation. Did somebody say black lives matter?

This corporate support of the Tea Party base has served both to strengthen the infrastructure of the far right and to undermine the living standards and economic security of ordinary people. The somewhat bizarre alliance between the culturally liberal Wall Street right and the culturally reactive Tea Party right paved the way for Trump. Corporations undercut pay and job security for workers, while they embraced multiculturalism. The Tea Party nourished the resentment against both.

There is a perverse and paradoxical symbiosis here. Corporate America and its Republican allies execute economic policies that make daily life more arduous for ordinary people. But they burnish their image by supporting liberal social causes like immigrant rights and protections for transgender people. And then the conservative social base gets mobilized against both trends.

Somehow, the corporations escape the wrath of working-class America. That gets deflected onto liberals, immigrants, blacks, and gays. Meanwhile, Democrats have been losing winnable elections because progressive cultural policies are easier for them to embrace than aggressively anti-corporate pocketbook policies. Going left on multicultural issues while largely failing to articulate a politics of class uplift cost Democrats the 2016 election.

Trump’s economic populism is, of course, fake. Four decades of an increasingly virulent business elite paved the way for it. On no significant issue are Trump’s pocketbook politics at odds with those promoted by big business.

IS THIS TOO HARSH? If you take a close look at the good-guy corporations on issues other than identity politics, here’s what you find: There are a small number of idiosyncratic corporations led by genuine progressives, such as the original Ben and Jerry’s, and God bless them. We also have corporations that are various shades of green, ranging from completely bogus green-washing, to entrepreneurs who have found ways to profit from marketing clean technology and a variety of renewable forms of energy.

Then we have the larger movement for corporate social responsibility, and its international counterpart, the voluntary movement to improve working conditions and environmental standards, by promoting labels for a broad range of products and processes. These range from fair-trade coffee to sustainable forestry to decent labor conditions for garment workers in Bangladesh, and dozens of others. Take a close look, and these certified goods represent a small fraction of total production, and they are losing more ground than they are gaining.

Indeed, if you go back half a century, the truth is that progress was made on the entire front of environmental, labor, public health, and safety issues when citizens mobilized and legislatures passed mandatory laws—not via corporate voluntarism. For two decades after World War II, business got along with unions, not because elites had had a change of heart but because of a power shift. The same was true of the spate of environmental laws enacted in the 1970s.

In the famous formulation of Lyndon Johnson, who was very skeptical when his Vietnam advisers told him that America needed to win hearts and minds, if you get them by the [private parts], their hearts and minds will follow. This is surely true, in spades, when it comes to reining in corporate excess.

Yes, it’s great to have some class traitors among your allies, but it’s no substitute for a real movement.

BUT WHAT ABOUT democracy itself? There is a whole school of democratic theory that associates liberal democracy with the spread of economic laissez-faire. Cheerleaders for freer markets like both Friedmans (Milton and Tom) have insisted that democracy and capitalism logically go together.

Going back to the days of Adam Smith, we’ve heard that free markets and free peoples reinforce one another. Supposedly, capitalism promotes democracy, because of common norms of transparency, rule of law, and free competition—for markets, for ideas, for votes.

Democracy and capitalism are intimate allies. So when an existential threat to democracy like Trump arises, the captains of industry will surely come together to defend core democratic institutions. Oh, did I miss that?

The nexus between free-market capitalism and democracy sounds plausible, until one examines the actual relationship throughout history.

Slavery was a quintessentially commercial enterprise. Abolitionists in liberal Massachusetts, center of the 19th-century textile industry that depended on cheap Southern cotton, spoke scathingly of the alliance between the loom and the lash.

In the 20th century, capitalists coexisted nicely with dictatorships, which conveniently created friendly business climates, cut taxes, and repressed independent worker organizations. Western capitalists have enriched and propped up third-world despots who crush local democracy. Western extractive industries have worked with dictators to plunder natural resources, pay kickbacks, exploit corruption, and give almost none of the benefits to local people.

Communist China works hand in glove with capitalist business partners to destroy free labor unions and to preserve the political monopoly of the party. Vladimir Putin presides over a rigged brand of capitalism and governs in harmony with approved kleptocrats. Western businesses helped work to overthrow insurgent democratic regimes that threatened their financial interests, from Chile to Iraq, and cut deals with dictators from Kazakhstan to the Congo. International companies and bankers promoted capitalism in post-Soviet Russia. They didn’t exactly promote democracy.

During the shabbier periods of American history, our government has protected purely commercial interests by sending in the Marines or fomenting coups. Today’s global backlash, in both its populist and religious-fundamentalist forms, is partly the result of the less-savory face of American corporate power overseas.

General Augusto Pinochet took his economic advice from los chicos de Chicago. His ultra free-market economic advisers got a lot of publicity for counseling the dictator on how to deregulate the Chilean economy. They were notably silent on Pinochet’s brutal repression of any political opposition.

In the 1930s, big business found it congenial to work with Mussolini, Hitler, and Franco. Adam Hochschild’s new history, Spain in Our Hearts, recounts how Texaco, in violation of the Neutrality Acts, literally helped turn the tide for Franco’s fascists against the Spanish Republic—not only by refusing to sell the Republic oil while generously supplying Franco’s forces, but also providing Franco’s Nazi ally with intelligence on the Republic’s oil sources so the Luftwaffe could sink the tankers.

Large German corporations, from Deutsche Bank to Thyssen, Krupp, and I.G. Farben, assumed Hitler could be worked with to serve common interests and would moderate once in office. When the Fuehrer only became more vicious, the German corporate elite went along for the ride, and got quite rich on rearmament until the unfortunate miscalculation of World War II.

Several American corporations briefly got into trouble for helping Hitler. Even after war was declared, Ford and GM subsidiaries in Germany continued to operate. ITT and RCA, via intermediaries in Switzerland, continued to collaborate with their German partners, Siemens and Telefunken. History shows that when circumstances demand awful choices, the logical conclusion of the corporate state is fascism.

TRUMP IS NOT HITLER. But if we think corporate America will serve as a bulwark against his excesses, we are as delusional as Trump is.

When right-wing Republicans went after the fundamentals of democracy, by suppressing the right to vote, or shutting down the government over budget disputes, or refusing to even hold hearings on dozens of judicial nominations, we didn’t see any warm and fuzzy ads from Google, Apple, or Starbucks.

Donald Trump calls out particular corporate executives when that is expedient, but his is a quintessentially corporate regime. With few exceptions, corporations conclude that Trump, weirdness and all, serves their interests. They are bankers and billionaires first, citizens a distant second.

Not only do corporations fail to promote democracy; the converse is also true. Both at home and abroad, democracy has expanded by limiting the power of business. Constraints on corporate abuses have been necessary to give ordinary people more liberty and security to pursue a decent livelihood. When that project fails, dark forces are often unleashed.

The political scientist Yascha Mounk makes a useful distinction. The problem threatening democratic practice today is not just illiberal democracy—governments with the form but not the substance of real democracy, from Turkey to Hungary to Russia and the dictatorial urges of Trump Tower. The problem is also undemocratic liberalism.

By this Mounk means liberalism in its European sense, as ultra-marketization that narrows the space for democratic deliberation. All the major trade deals of the past two decades and the austerity rules of the European Union add up to what the economist Dani Rodrik calls hyperglobalization. The goal is to diminish the capacity of the democratic nation-state to housebreak capitalism, and it succeeds all too well.

Mounk’s point is that undemocratic liberalism and illiberal democracy feed on each other, by leaving people who are not part of the Davos set far behind. So the challenge for progressives is not to make better alliances with corporations, but to restore democratic constraints on corporate power.

In the late 1990s, a British NGO called Publish What You Pay (PWYP) devised an ingenious strategy for going after the bribery paid by Western extractive industries to third-world dictators. It pressured these Western corporations to disclose the bribe payments. A few, beginning with BP, agreed. Due to persistence and luck, PWYP even managed to get a mandatory disclosure provision included in the Dodd-Frank Act. Companies now had to disclose such payments in their annual filings with the Securities and Exchange Commission.

The regulations carrying out this provision were among the very first to be scrapped in Trump’s war against regulation. You can just imagine how many corporations tried to block the repeal, in their splendid civic defense of the transparency that is allegedly common to efficient markets and democracy. That would be none.

Thus far, Donald Trump has assaulted American democracy in several respects. He has stirred up hatred by associating his presidency with far-right haters. He has done everything in his power to undermine the free press. He has sought to use decrees to undermine the rule of law. Substantively, his policies have escalated the war against a balanced, socially decent form of capitalism.

Some of corporate America has resisted the pure hate part, and for this we can offer one cheer. But let’s not kid ourselves.

Despite the touchy-feely corporate commercials about America being a big, happy, diverse family, there is far more that unites business with Trump than divides them. At the end of the day, we need the same movement to keep Trump from destroying basic democracy and to keep business elites from destroying a decent brand of capitalism. We will defend and redeem American democracy the old-fashioned way, by mobilizing ordinary citizens.

About the Author

Robert Kuttner is co-founder and co-editor of The American Prospect, and professor at Brandeis University’s Heller School. His latest book is The Stakes: 2020 and the Survival of American Democracy. In addition to writing for the Prospect, he writes for HuffPost, The Boston Globe, and TheNew York Review of Books.